ZAHID PACKAGES (PVT.) LTD. VS ADDITIONAL COLLECTOR OF CUSTOMS (ADJUDICATION), MCC, FAISALABAD, 2017 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1285 (2015)

(a) Sales Tax Act (VII of 1990)---

----Ss. 2(41), 4, 8 & 13---SRO No.551(I)/2008, dated 11-6-2008---Exemption---Admissibility of exemption of sales tax on sales of permitted admissible process waste--Duty and Tax Remissions Scheme for Exports---Object and Scope---Crux of the present case revolved around the admissibility of exemption of sales tax on sales of permitted admissible process waste which accrued out of manufacturing process under Duty and Tax Remissions for Export Scheme (D.T.R.E.)---'D.T.R.E.' Scheme, enabled import or local procurement of duty and tax from inputs for export purpose---Objective of D.T.R.E. scheme was to neutralize the incidence of duty and taxes on the imported or locally procured content of the export product---Neutralization was provided by way of duty and tax remission against the exporter product---Term 'remission' had a special connotation in legal terms---When 'D.T.R.E.', was universally seen as a Duty Remission Scheme, it must be understood as a duty waiver by the Government---Tax or duty which the Government was otherwise entitled to collect and retain, was being waived or being given remission of by way of a policy to encourage exports---Such benefit must be considered to be a temporary duty waiver by the Government---Supplies envisaged under the Sales Tax Act, 1990, were classified under three general categories e.g., exempt, zero rated or standard rated for the purposes of imposition of tax---Supplies that were standard rated or zero-rated, were considered to be 'taxable supplies'---All export supplies were zero-rated under S.4 of the Sales Tax Act, 1990 and under the law, a zero-rated supply was a taxable supply on which sales tax was levied at the rate of 0%---No output tax would be payable in respect of zero-rated supplies---Entities registered under the Sales Tax Act, 1990, effectuating zero-rated supplies, were entitled to claim their input tax deductions on goods in services acquired in the course of making such taxable supplies---By virtue of exclusion from the ambit of subsection (41) of S.2 of the Sales Tax Act, 1990, sales tax was not chargeable on exempt supplies, which fell within the folds of S.13 of the Sales Tax Act, 1990---Gulf of difference existed between zero-rated and export supplies---Any remission under 'D.T.R.E. Scheme', could not be associated with an exemption under the Sales Tax Law---'D.T.R.E.' Scheme, specifically dealt with zero-rated supplies---Only benefit which 'D.T.R.E. Scheme' extended was that it pushed back the matter of export or zero-rating one step behind in the supply chain---Exemption of sales tax availed by the appellant on the sale of admissible bona fide waste accrued out of manufacturing process under 'D.T.R.E. Scheme', could not be termed as a double exemption---Exemption of sales tax under S.R.O. No. 555(I)/2008, date 11-6-2008, could not be denied on the ground of double exemption in circumstances.

2010 PTD 2673 ref.

(b) Duty and Tax Remissions for Export Scheme (D.T.R.E.)---

----Rr. 305 & 296---Utilization of input goods---Local sale---Scope---Utilization of input goods, under R.305 of 'D.T.R.E.' Scheme, specifically dealt with the input goods specified therein and according to sub-rule (i) of R.296(I) of the Scheme, input goods meant "goods and services eligible for acquisition or used or consumed in the manufacture of output goods for export"---Law solely required input goods to be used or consumed in exported goods within the period stipulated under R.305 of 'D.T.R.E. Scheme'---Process waste was not an input product, but in fact was a product accruing out of consumption process---Local sale thereof, could not be tagged with the utilization period stipulated under 'D.T.R.E. Scheme'.

(c) Sales Tax Act (VII of 1990)---

----S. 2(44)---Duty and Tax Remission for Export Scheme---Admissibility of waste or manufacturing loss---Actual wastage or loss incurred during manufacturing operation, was admissible only upto the extent allowed vide the consumption certificate issued by the competent authority under R.299(3)(4) of 'D.T.R.E.' Scheme---Impugned audit report showed that the appellant company, maintained its process wastage within the tolerance limits allowed under the scheme---Policing mechanism devised under 'D.T.R.E.' Scheme was applicable only to the extent of ensuring that the user would remain within the limits of process waste allowed under R.299 of the Scheme---Local sale of said material would attract subsection (44) of S.2 of the Sales Tax Act, 1990---Relevant time for imposition or exemption under S.2(44) of the Sales Tax Act, 1990 would be the time at which the goods were delivered or made available to the recipient of the supply---Transaction, the date of sale/delivery of process waste to the buyer, would be the relevant date for the purposes of sales tax.

(d) Customs Act (IV of 1969)---

----S. 156(1)(10-A)---Penal consequences for violation of any condition, limitation or restriction, in respect of the goods on which exemption had been granted---In the present case, the Adjudicating Officer had imposed a penalty of Rs.500,000 under S.156(1)(10-A) of the Customs Act, 1969 for late submission of reconciliation statement under R.307-D of Duty and Tax Remission for Exports Scheme---Penal consequences under S.156(1)(10-A) of the Customs Act, 1969, were actuated whence conditions; limitations or restrictions with regard to exemption grated under the Customs Act, 1969, were breached; but in the present case no such event had occurred as Duty and Tax Remissions for Exports Scheme, could not be equated with exemption---Penalty imposed by the Adjudicating Officer, stood vitiated.

(e) Words and phrases---

----'Remission'---Meaning explained.

Webster's Third New International Dictionary (Unabridged) and Balck's Law Dictionary ref.

Tariq Mehmood, A.R. for Appellant.

Miss Amna Parveen for Respondents.

JUDGMENT

OMAR ARSHAD HAKEEM, JUDICIAL MEMBER.---This judgment shall dispose of above mentioned appeal filed against Order-in-Original No.19/2014 dated 15.04.2014 passed by the learned Additional Collector of Customs (Adjudication), MCC, Faisalabad.

2.The facts of the case, as reported by the Superintendent. (DTRE). Customs Dryport, Faisalabad are that audit of Messrs Zahid Packages (Pvt.) Limited pertaining to DTRE approval No.FSD/421/ 31/1/2011 was carried out and during audit following discrepancies/ irregularities were observed:---

(a)The DTRE user imported a quantity of 4.787.464 Kgs of Kraft Paper and Fluting Paper under aforementioned DTRE approval and consumed only a quantity of 4,782,672 Kgs in the manufacturing of output goods meant for export. In this way, the DIRE user failed to consume the remaining quantity of 4792 Kgs of aforesaid raw material upon which government revenue amounting to Rs. 1,37,373/- (comprising of Rs. 58,388/- as Customs duty + Rs. 59,555/- as sales tax + Rs.2,919/- as federal excise and 16.511/- as income tax) is recoverable along with additional duty and additional tax as per DTRE Rules 307-A notified vide SRO 450(I)/2001 dated 18.06.2001 read with section 83 of the Customs Act, 1969.

(b)The DTRE user consumed a total quantity of 4,782,672 Kgs of aforesaid raw materials but failed to make disposal of wastage obtained @ 10% i.e. 478,267 Kgs valuing Rs. 5,260,939/- @ Rs. 11/Kg) and deprived the national exchequer from its legitimate revenue amounting to Rs. 1,210,016/-(comprising sales tax Rs. 1,157,407/- @ 22% and federal excise duty Rs.52,609/- @ 1%) which is recoverable from the said DTRE user along with additional duty and additional tax.

(c)The DTRE user was required to submit a reconciliation statement in the form as set out in Appendix-III within 60 days of the expiry of utilization period allowed or earlier after export. But the DTRE user failed to submit the said reconciliation statement within the stipulated period in violation of Rule 307-D vide SRO 450(I)/2011 dated 18.06.2001. This act on the part of the said DTRE user attracts the imposition of penalty under the relevant provisions of law.

3.On the basis of above the appellants were charged with the violation of DTRE Rules 298, 307A(1), 307D, 307G(2) of S.R.O. 450(I)/2001 dated 18.06.2001 readwith section 83 of the Customs Act, 1969 punishable under clause 10A of section 156(1) of the Customs Act, 1969 and were called upon to show cause in terms of sections 180 and 32(2) of the Customs Act, 1969 as to why the duty and taxes amounting to Rs. 13,47,389/- along with additional duty and additional tax and surcharge may not be recovered from them and as to why penal action should not be taken against them under the aforementioned provisions of law.

4.In sequel to impugned show cause notice adjudication proceedings were conducted which concluded into an adjudicatory, order and the adjudicating officer precisely, ruled as follows:--

"In view of the foregoing I have come to the conclusion that charges as stated in the show cause notice stand established. As regard charge No. 1, the respondent has already deposited the amount. As regards charge No. 2 the respondent is directed to pay the due amount to the tune of Rs. 1,210,016/- of sales tax, federal excise duty on account of disposal of paper waste along with additional tax and additional duty as per relevant law. Regarding charge No.3 a penalty of Rs. 5,00,000/- is imposed upon the DTRE user under section 156(1)(10A) of the Customs Act, 1969 for violation of Rule 307(D) of SRO 450(I)/2001 dated 18.06.2001. Department is directed to recover the aforementioned amount. Show cause notice is disposed off accordingly."

4a.Being aggrieved of the above said order the appellant has filed the instant appeal before the Tribunal on the following grounds:--

(i)That the order in original passed by the learned Additional Collector (Adjudication) is bad in law and against the facts of the case.

(ii)That the order in original was in hurry, reasonable opportunity of being heard was not provided to the appellant, despite that the appellant requested to provide opportunity being heard vide letter dated 18.04.2014.

(iii)That the appellant made the waste sales within utilization period (before 30.01.2013) as granted by the Regulatory Collector.

(iv)That the reconciliation statement of the said DTRE is due for submission on 31.01.2013, as per notification issued by the MCC, Faisalabad however the appellant voluntarily submitted the reconciliation statement before maturity date without any notice/letter.

(v)That the learned Additional Collector miserably ignored the prescribed format of Appendix-III in Customs Rules, 2001 under S.R.O. 450(I)/2001 dated 18.06.2001, as set out for reconciliation statement of input/output and exported goods and the prescribed format did not require the information of waste sales. However waste sales records were never requisitioned by the audit team during audit proceedings.

(vi)The learned Additional Collector (Adjudication) Faisalabad miserably ignored the invoices of waste sales and treated as "so called invoices" while the appellant have properly issued the invoices and already recorded into sales tax returns as per provisions of the Sales Tax Act, 1990 read with S.R.O. 551(I)/2008 dated 11.06.2008 as amended S.R.O. 595(I)/2012 dated 01.06.2012.

(vii)That the appellant made the exempted supply under S.R.O. 551(I)/2008 dated 11.06.2008 as amended SRO 595(I)/2012 dated 01.06.2012 and for exempted supply there is no need to mention or marked the DTRE approval number on invoices. As per DTRE Rule-304 only zero-rated invoices required to mention the number and date of DTRE approval of the buyer while waste sales is an exempt supply.

(viii) That the learned Additional Collector of Customs (Adjudication) failed to identify the instances of penal charges under section 156(1)(10A) of the Customs Act, 1969 the said penal action is illegal and irrelevant against the facts of the case.

(ix)That the learned Additional Collector of Customs (Adjudication) charged a very harsh penalty of Rs. 5,00,000/- while the DTRE user voluntarily submitted the reconciliation statement before maturity date.

5.Leveling a variety of allegations and narrating the sequence of events, in all, the Assistant Collector, Customs Dryport, Faislabad deposited the parawise comments as under:--

(i)Not Admitted. The order in original was passed on merits and within the scope or law.

(ii)Not admitted. The appellant was provided full opportunity to defend the case. Dates of hearing were fixed in the instant case for 10.03.2014, 17.03.2014, 03.4.2014 and 15.04.2014.

(iii)Admitted to the extent that utilization period was available upto to 31.01.2013 the DTRE Rule 307D clearly stipulates that "within sixty days of the expiry of utilization period allowed under this sub-chapter, or earlier after export, a DTRE user shall file to the Regulatory Collector a reconciliation statement in the form as set out in Appendix-III. According to sales register the appellant made his last sales on 08.04.2012 under DTRE approval. As per DTRE Rule 307D reconciliation statement was due on 07.06.2012 whereas the DTRE user submitted reconciliation statement along with allied documents on 14.06.2012 earlier after export/sales. As per last sales/export dated 08.04.2012 the sales of waste is beyond the expiry of utilization period which was due on 07.06.2012 according to earlier after sales/export under DTRE Rule 307D of SRO 450(I)/2001 dated 18.06.2001.

(iv)Not admitted As per DTRE Rule 307D earlier after export on 08.04.2012 reconciliation statement was due on 07.06.2012.

(v)Not admitted. Reconciliation statement is submitted on completion of all kinds or supplies i.e. finished goods and disposal of wastages as well as consumption of input goods. The appellant produced records voluntarily for audit meaning thereby that earlier after finalization of all transactions (sales/purchases/ consumption) had been made under the aforesaid DTRE approval.

(vi)Not admitted. The DTRE Rule 306 clearly stipulates that "a bill of export or goods declaration filed for the export of a DTRE consignment under this sub-chapter shall contain the DTRE approval number and shall be subject to all formalities for other declarations or endorsements, if any. Messrs Zahid Packages (Pvt.) Limited was granted DTRE approval as indirect export. Similarly as per aforesaid DTRE Rule he was bound to mention DTRE approval on each kind of sales invoice in order to bona fide sales under DTRE scheme. In this regard this Collectorate issued letter to the buyer in order to verify the purchase of "paper waste" from the appellant made under impugned DTRE approval or otherwise. The authorized Chartered Accountant submitted reply on behalf of the purchaser/buyer on 26.04.2014. That the taxpayer has made purchases from Zahid Packages (Pvt.) Limited under normal course of purchasing instead of under DTRE" The claim regarding sales of paper waste without mentioning DTRE approval number and date on the sales invoice cannot be treated under DTRE approval.

(vii)Not admitted. The DIRE user was granted DTRE approval under SRO 450(I)/2001 dated 18.06.2001 he cannot go away beyond the scope of DTRE Rules. As per DTRE Rule against all export consignments/local sales relating to DTRE approval, the DTRE user is bound to mention DTRE approval number and date. Moreover, the stance of the DTRE user is that under DTRE Rule 304, zero rated invoices are required to mention number and date of DTRE approval and under exempted supply there is no need to mention mark the DTRE approval number on invoice whereas the sales invoices produced by the appellant regarding sale of paper waste are zero rated sales tax invoices. These invoices are afterthought as the same are issued in the month of June upto September 2012 whereas the last sales was made on 08.04.2012 and the record thereof was due on 07.06.2012 but it was submitted on 14.06.2012.

(viii) Not admitted. Section 156(1)(10A) clearly stipulates that "such goods shall be liable to confiscation and the person to whom the exemption was granted shall be liable to a penalty not exceeding ten times the value of goods and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding two years. The Additional Collector has rightly imposed the penal charges.

6.During the course of hearing it was further argued on behalf of the respondent department that the DTRE was an exemption Scheme and therefore, claim of appellant under S.R.O. 595(I)/2012 dated 01.06.2012 tantamount to double exemption which has specifically been prohibited by FBR vide Ruling C. No. 4(29)DTRE/2010-64766 dated 07.05.2010.

7.We have carefully considered the arguments advanced by rival parties, perused the record and discerned the relevant law and our findings are as under;

8.Crux of the case revolves around the admissibility of exemption of sales tax on sales of permitted admissible process waste which accrued out of manufacturing process under the Duty and Tax Remissions for Export Scheme;

9.Suffice to say that the following questions arise out of the controversy involved in the instant case:

(a)Whether, the Duty and Tax Remissions Scheme for Exports is an exemption scheme?; and therefore, exemption of sales tax claimed on paper waste accruing out of the manufacturing process tantamount to double exemption is inadmissible in light of CBR's ruling?

(b)What is the true purport of utilization under the DTRE Scheme? ; and

(c)Whether the sale of process waste accrued out of manufacturing under DTRE is tagged with utilization period enumerated under Rule 305 ibid?

(d)Whether under the facts and circumstances of the case date of approval of DTRE on input goods would be relevant date for imposition of sales tax on sales of admissible process waste or the relevant date would be the date of its actual sale?

(e)Whether under facts and circumstances of the case the appellant has adduced sufficient evidence proving sale of paper waste during the currency of exemption granted under S.R.O. 551(I)/2008 dated 11.06.2008 vide amending SRO 595(I)/2012 dated 01.06.2012?

10.Prior to embarking upon the discussion with regards to merits of instant appeal the legal purport of Duty and Tax Remissions for Exports (DTRE) Scheme has to be seen so that we are able to ascertain the purpose or intention behind its conception; A general overview of the Scheme reveals that the DTRE Scheme enables import or local procurement of duty and tax free inputs for export purposes. Conclusively speaking the objective of DTRE Scheme is to neutralize the incidence of duty and taxes on the imported or locally procured content of the export product. The neutralization is provided by way of grant of duty and tax remission against the exported product.

11.The term 'remission' as per Webster's Third New International Dictionary (Unabridged) means, cancellation or relinquishment of the whole or a part of a financial obligation, voluntary release of a debt or claim to a debtor or person liable to a creditor or claimant having legal capacity to alienate; relief from a forfeiture or a penalty. In Black's Law Dictionary, remission is described as a cancellation or extinguishments of all or part of a financial obligation. In context of conventional remission, under civil law, it is understood as remission expressly granted to a debtor by a creditor having capacity to alienate.

12.It can thus be seen that the term 'remission' has a special connotation in legal terms. When DTRE is universally seen as a Duty Remission Scheme, it must be understood as duty waiver by the Government. In other words, a tax or duty which the Government is otherwise entitled to collect and retain, is being waived or being given remission of by way of a policy to encourage exports. In essence, therefore, such benefit must be considered to be a temporary duty waiver by the Government.

13.Apropos the initial question proposed above, it is seen that the supplies envisaged under the Sales Tax Act, 1990 are classified under three general categories e.g. exempt, zero rated or standard rated for the purposes of imposition of Tax. Supplies that are standard rated or zero-rated are considered to be 'taxable supplies' as defined under sub-section (41) of section 2 of the Act of 1990. It is seen that all export supplies are zero rated under Section 4 of the Sales Tax Act, 1990 and under the law, a zero-rated supply is a taxable supply on which sales tax is levied at the rate of 0% and thus through implication no output tax will be payable in respect of zero-rated supplies. However, entities registered under the Sales Tax Act effectuating zero-rated supplies are entitled to claim their input tax deductions on goods or services acquired in the course of making such taxable supplies; On the other hand by virtue of exclusion from the ambit of subsection (41) or section 2 of the Act of 1990, sales tax is not chargeable on exempt supplies which fall within the folds of section 13 of the Act of 1990. It is also seen that section 8 of the Sales Tax Act proscribes entitlement to claim an input tax deduction in respect of goods or services acquired in the course of furtherance of making exempt supplies. It would also be pertinent to note that the entities that make only exempt supplies cannot register under the Sales Tax Law as they are not providing taxable supplies as per Act of 1990. Consequently, we are of the firm opinion that there is a gulf of difference between Zero rated and exempt supplies therefore any remissions under DTRE Scheme cannot be associated with an exemption under the Sales Tax Law.

14.In view of aforementioned, it is axiomatic that DTRE Scheme specifically deals with zero rated supplies. It is settled law that the only benefit the Scheme extends is that it pushes back the matter of export or zero rating one step behind in the supply chain (2010 PTD 2673) and thus the FBR Ruling C. No. 4(29)DTRE/2010-64766-00 dated 07.05.2012 to the extent of equating DTRE law with exemption does not stand on sound footings consequently, exemption of sales tax availed by the appellant on sale of admissible bona fide wastage accrued out of manufacturing process under DTRE Scheme cannot be termed as a double exemption; We consequently hold that the exemption of Sales Tax under S.R.O. 551(I)/2008 dated 11.06.2008 cannot be denied on the grounds of double exemption.

15.Apropos the second and third question transposed above applicable portions of rules 305 and 296 of DTRE Rules as available in the statute book during the relevant period are reproduced below for ease of reference;

305. Utilization of input goods,---The input goods acquired under this sub-chapter shall be utilized in the manufacture and export of output goods within twenty four months from the date of approval of DTRE application:

Provided that the said period may be extended by the Board in cases of exceptional circumstances and in case of extension such fresh securities as mentioned in rule 300 covering the extension period shall be obtained.

296. Definitions.---(I) In this sub-chapter, unless there is anything repugnant in the subject or context,--

(i)"input goods" means goods and includes services eligible for acquisition and also includes,--

(a)trims and accessories;

(b)electricity and gas on which sales tax has been paid; and

(c)furnace or diesel oil for the generation of electricity used or consumed in the manufacture of output goods for export under this sub-chapter;

16.A combined reading of afore-transcribed Rules makes it quite clear that utilization under the rule 305 of DTRE Scheme specifically deals with the input goods specified therein and according to sub-rule (i) of Rule 296(1) ibid, input goods mean "goods and services eligible for acquisition or used or consumed in the manufacture of output goods for export" therefore, it can safely be interpreted that the utilization period under the DTRE law solely requires input goods to be used or consumed in exported goods within the period stipulated under Rule 305 ibid; It need not be emphasized that process waste is not an input product, it is in fact a product accruing out of consumption process therefore its local sale cannot be tagged with the utilization period stipulated under the DTRE Scheme.

17.Apropos the fourth question proposed above it is axiomatic that the Duty and Tax Remissions for Export Scheme prescribes the admissibility of wastage or manufacturing loss under Rule 299 ibid. It is seen that actual wastage or loss incurred during a manufacturing operation is admissible only upto the extent allowed vide the consumption certificate issued by the competent authority under sub-rules (3) and (4) of Rule 299 ibid: From the perusal of the impugned audit report, it appears that the appellant unit maintained its process wastages within the tolerance limits allowed under the Scheme. After examining the whole structure of the DTRE Scheme ibid Sales Tax Act, 1990 with context to process waste accrued out of process of manufacturing it is seen that the policing mechanism devised under the DTRE Law is applicable only to the extent of ensuring that the user remains within the limits of process waste allowed under Rule 299 ibid, therefore, as far as the local sale of said material is concerned, we are of the considered opinion that such an event would attract, subsection (44) of Section 2 of the Act of 1990.

18.Section 2(44) as was on the statute book during the relevant period thus reads:--

2(44) "time of supply," in relation to,-

(a)a supply of goods, other than under hire purchase agreement, means the time at which the goods are delivered or made available to the recipient of the supply;

(b)a supply of goods under a hire purchase agreement, means the time at which the agreement is entered into; and

(c)services, means the time at which the services are rendered or provided;

19.A bare reading of aforementioned provision of law reveals that the relevant time for imposition or exemption of sales tax would be "the time at which the goods are delivered or made available to the recipient of the supply", therefore we are convinced that in the instant transaction, the date of sale/delivery of process waste to the buyer would be the relevant date for the purposes of Sales Tax.

20.Apropos fifth question the appellant relied on certain invoices in order to prove sale of impugned process waste paper during the exempt period, therefore to confirm the veracity of these documentary evidences the respondent department was directed on 15.10.2014 to conduct a reconciliation exercise in order to check the veracity of these invoices against the appellants accounts. They also required to check existence of buyers and verify ensuing monetary transactions but inspite of a multitude of opportunities provided the respondent department failed to deposit a reconciliation report in this regard therefore, in the aforesaid factual matrix and after appreciation of evidence on record and in view of reluctance of respondents to carry out the verification exercise this Tribunal has been left with no other option but to extend the benefit of doubt to the appellant and accept its stance with regard to sale of process waste during the currency of exemption of sales tax granted under S.R.O. 551(I)/2008 dated 11.06.2008 amended vide S.R.O. 595(I)/2012 dated 01.06.2012.

21.Admittedly the appellant does not contest non-payment of FED amounting to Rs. 52,609/- therefore we order the same to be recovered along with additional duty.

22.It is seen that the adjudicating officer has imposed a penalty of Rs. 5,00,000/-under section 156(1) 10A of the Customs Act, 1969 for late submission of Appendix (iii) i.e. reconciliation statement, under Rule 307D of DTRE Scheme; Section 156(1)10A thus reads;

10(A) If any condition, limitation or restriction imposed by Federal Government or by the Board for grant of partial or total exemption from customs duties is violated in respect of the goods on which exemption has been granted. Such goods shall be liable to confiscation and the person to whom the exemption was granted shall be liable to a penalty not exceeding ten times the value of goods; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding two years. 19 & 20

23.A perusal of controlling part of aforementioned clause 10A of Section 156(1) reveals that penal consequences under the said clause are actuated whence conditions and limitations or restrictions with regard to exemptions granted under the Customs Act are breached but in the instant case no such event has occurred as Duty and Tax Remissions for Exports Scheme (as discussed in para-13) cannot be equated with an exemption. In view of what has been discussed the penalty imposed by the adjudicating officer stands vitiated.

HBT/141/Tax(Trib.) Appeal allowed.